The budget projects that the deficit will peak at nearly $1.6 trillion in the current fiscal year, a post-World War II record, and then decline but remain at economically troublesome levels over the remainder of the decade. In the coming fiscal year 2011, which begins in October, the projected shortfall would be under $1.3 trillion. When Mr. Obama took office, the projected $1.3 trillion deficit was equivalent to more than 9 percent of the gross domestic product. Economists generally say annual deficits should not consistently exceed 3 percent. While Mr. Obama’s budget would get no closer than 3.6 percent in any of the next 10 years, he proposes to reach the lower level by 2015 with the help of a yet-to-be-named bipartisan commission — an uncertain prospect at best given the intensity of Republicans’ opposition to his agenda.

For perspective, attached is the 2010 budget.

His $3.8 trillion budget for fiscal year 2011 incorporates his signature proposals to overhaul the health care system and energy policies, though they are languishing in Congress. Education, civilian research, food and drug safety and biomedical research would all get more money. For NASA, Mr. Obama proposed to cancel plans to return to the moon but sought $18 billion in spending for new technologies that could take humans farther into space.

The budget request for the Department of Health and Human Services was $81.3 billion, up from $79.6 billion a year ago. The National Institutes of Health’s budget request rose by $1 billion, to $32 billion, more than was requested last year.

The keen eye will make the astute observation that the proposed budget showcases the structural decline of this country.

• Social security takes the giant portion of the budget. From $711 bn in 2010, it has now been increased to $738 bn which is a more than 3% rise.
• Net Interest has risen from $188 bn to $251 bn. This is the price that US will pay for years and years to come. Along with Social security, the Net Interest will keep rising for the foreseeable future.
• Medicare jumps from $468 to $498 bn.
• Job security funds have been slashed by 10%. It will be interesting to know if the budget is projecting a reduction in unemployment.

Looking at this budget, I continue to support Gross Investor call  ”Investors Look East!”. America is in a structural decline which is quite clearly visible to the common man and yet somehow the folks to the FED have not yet figured it out.

Now assuming the FED had allowed last year crisis to play itself out by allowing the likes of GS and MS to go belly up and not raked up the 3 trillion debt pile to save them, the budget would have had $300 bn less to pay as Interest cost. What is more, US would for once and for all, got rid of these den of thieves with the cost of an unemployment rate at 14-15%. But that would have been lesser price to pay than surviving with Banking Cabal.

Today, not only is the unemployment creeping to 15% by 2011, but US treasury has bankrupt itself saving these thieves.

Source for graphics: NY Times